By NEIL HARTNELL
Tribune Business Editor
The company charged with transforming Nassau’s cruise port into a world-class destination is quietly seeking to raise $100m from the Bahamian capital markets in a tightly-controlled private offering.
Multiple Tribune Business contacts, speaking on condition of anonymity, revealed that Nassau Cruise Port Ltd and its financial advisers are currently seeking to raise debt capital to act as a bridge financing facility that will enable them to fund construction activities set to begin in the 2020 first quarter.
This newspaper was told that while a “term sheet” containing key details of the offer, including the total amount sought, terms and conditions and purposes for which funds will be used, has been produced its circulation is being tightly controlled and just a few people have received seen and its contents.
It is understood that CFAL, the former Colina Financial Advisors, is leading the raise for Nassau Cruise Port Ltd and its ultimate parent, Global Ports Holding. However, it is thought that only itself and Kenwood Kerr’s Providence Advisors - as well as the hotel industry pension funds, a client of the latter - have received a copy of the offering’s term sheet.
“I could confirm that I was told it’s $100m, which is a lot of money for them to take that on themselves,” one source, speaking on condition of anonymity, told this newspaper. “That’s a lot of risk to keep in-house.
“I think it’s bonds/loans - some kind of hybrid structure. They haven’t shared it. They’re being quite silly. They’re trying to keep it all to themselves, and that’s not the way you develop the capital markets.”
Another contact, also speaking on condition of anonymity, added: “There’s a term sheet going around. I know they’re looking for bridge financing. The investment fund [Bahamas Investment Fund] does not launch for another 18 to 24 months.”
Anthony Ferguson, CFAL’s principal, did not respond to messages seeking comment that were left on both his office and cell phones. Michael Maura, Global Port’s Holding’s director of the Americas, also could not be contacted for comment despite multiple attempts to do so, while Colin Murphy, Global Ports Holding’s business development head for the Americas, was unaware of any capital raise.
Mehmet Kutman, chairman of Global Ports Holding, the UK-listed, Turkish headquartered cruise port operator, did not respond to Tribune Business’s e-mail seeking comment.
The Bahamas Investment Fund, for which CFAL will act as administrator, is to be created to hold a combined 49 per cent equity stake in the Nassau cruise port on behalf of Bahamian investors. Under Global Ports’ Heads of Agreement with the Government, the Fund will issue two share classes, A and B, with one representing debt and the other equity investments.
It is unclear whether the Bahamas Investment Fund will raise capital to pay out the current bridge facility, but it will seek to attract investments by some 20,000 Bahamians.
“There will be an equity investor class and debt investor class,” the Heads of Agreement stipulate. “Class A investor shares will represent an investment in equity, and the Class B investor shares will represent an investment in debt. The minimum investment for the Class A investor shares will be $1,000, and for the Class B investor shares the minimum investment will be $50,000.”
Mr Kutman previously said he wanted as many as 10,000 Bahamians to buy into the Fund’s equity component alone, with Global Ports Holding making available a $10m loan facility to help small retail investors acquire shares.
Setting out his vision for Nassau cruise port’s $250m transformation into a waterfront destination and entertainment centre, the Global Ports Holding chairman told Tribune Business earlier this year that the winning bidder wanted to increase passenger spending by more than 100 percent and transform the entire city into a “worldwide brand”.
He added that the cruise port operator intended to act as a “facilitator” by enabling Bahamians to transform Prince George Wharf and the wider downtown area into “a national monument” that will mirror the “landmark” effect the Sydney Opera House has had for Australia.
Mr Kutman described the Nassau cruise port’s transformation as “the most important and difficult” project that Global Ports Holding has taken on because its impact extends beyond the port’s boundaries in acting as a key catalyst to stimulate Bay Street and downtown Nassau’s revival.
The Global Ports Holding chief explained that, unlike its 16 other ports in Havana, the Mediterranean and Far East, the success or failure of Nassau’s cruise facility has a much wider economic effect - not least because New Providence’s 270,000 population is dwarfed by the current 3.6m cruise visitors it attracts.
And, while the company largely met the retail “product mix” already in place at ports such as Barcelona and Valletta, Mr Kutman suggested there needed to be a “mentality change” in Nassau towards selling authentic Bahamian products as opposed to those that were foreign-produced.